Disgorgement

DEFINITION of 'Disgorgement'

A repayment of ill-gotten gains that is imposed on wrong-doers by the courts. Funds that were received through illegal or unethical business transactions are disgorged, or paid back, with interest to those affected by the action. Disgorgement is a remedial civil action, rather than a punitive civil action.

However, disgorgement payments are not only demanded of those who violate securities regulations. Anyone profiting from illegal or unethical activities may be civilly required to disgorge their profits.